Health Care Prior to Medicare?

[Bearsixty7]

and don't be surprised if some future changes bring back denial of coverage due to preexisting conditions (prohibited with the ACA, but some people hate that), so assuming you can always get insurance later isn't necessary a truth because that "later" insurance may not cover the big ticket issues plaguing you then.

I already see a few companies Denying for pre-existing conditions, then the agent refers you to another plan. It's in the wording of what the "Heathcare" company defines itself as.

 

[Bearsixty7]

My experience was that I couldn't find enough information about my insurance options on my own. I tried about four or five agents before I finally found one that could provide enough information for me to make any decisions. Some of them could quote premiums, but that was about all. They didn't seem to actually have much expertise in insurance. It was a frustrating process.

Searching for healthcare insurance options is a total PITA, but you're the only one who can seek out the advice you need and determine if it will work for you.

You got that exactly right! Going through it myself.

 

[Bearsixty7]

How much is enough is sorta a tough question. At some point, one knows they have enough money, but prior to that point, there is uncertainty about how much is enough. I have modeled our finances so many ways it makes my head spin. I think we have enough, but of course I wish I KNEW we had enough, but I think we are good. Except for the health care issue.

I am right there with you!
I actually think we have a couple options and either one is going to work for us and be about what I had budgeted for or just under. Only issue right now is, we had to sign up by 2/20 to be covered by 3/1 when my coverage from my past employer expires, so we'll be uncovered for a month.

 

[Bendboater]

I still don't think a tractor forum is the best place to research such a weighty topic, but you are correct that there are a lot of common sense folks here who have already been down this road.
With that, I will toss out some ideas that will look random, but they all play together (and not necessarily well):

If you are not happy at work, then by all means make a change. Retire or go do something else. Life is way too short to not be happy.....assuming you have the means to do something about it.

Health insurance options will vary somewhat depending on your state of residence, but in general they are:
1 - Employer sponsored
2 - COBRA
3 - Private plan
4 - Affordable Care Act (aka; Obama Care)
5 - Medicaid
6 - Pre-65 Medicare (you have to be seriously sick for this)
7 - Health share ministry
8 - Self insure (i.e.; no insurance)

Options 1 and 2 are the same, just a difference on who pays.
Likewise, 3 and 4 are also the same, just a difference in how much you will "probably" pay.
I suspect that 5 and 6 don't apply to you.
Option 7 really isn't "insurance". Some folks like it, but research it well.
And 8 can be a BIG gamble that "could" have life long consequences.

Medical costs (including insurance premiums and deductibles) seem to be increasing by about 5% ABOVE inflation every year.

Note that once you are on Medicare, health care still isn't "free". Different ways to go (Advantage vs. Medigap), but here in Oregon (and friends in other states report similar), I budget $1000/month for my wife and I (we are both on Medicare) for "all" health care expenses (including dental and vision)....increasing by 5% above inflation every year. Yea, yea, I know lots of folks will come on and say how much less they pay (or think they pay)...good for them. I am just saying that Medicare isn't free. Sharing this so you can be sure to budget for your health care expenses into the future (assuming your crystal ball isn't as foggy as mine).

You may (or may not) have lower overall expenses as you get older. Sure, you may travel less travel. But how about now having to pay someone to paint the house instead of doing it yourself. Also, you may find taxes increase as you get older.

A typical retiree pays less in taxes during the first few years of retirement (especially if they haven't started Social Security) than they do later on in retirement (due to RMD's from IRA accounts). This possibly makes this early retirement time frame a good opportunity to do Roth conversions assuming, of course, that you have any Traditional IRA accounts.
But any conversions (or sale of a business, home/stock sales, etc.), could reduce your ACA subsidy (should you go that route). And/or it could trigger IRMAA surcharges on your Medicare premiums (there is a two year look back so income at age 63 will will not only effect your ACA subsidy the following year but your Medicare premiums at age 65 as well).

Long Term Care isn't cheap, but you may be able to cover it by the sale of your home (assuming you own your home free and clear) since you won't need a home when in LTC. Of course, this doesn't work if you want care at home and/or your spouse isn't needing long term care at the same time. You could do a reverse mortgage (personally I'm not a fan of them).

Life isn't guaranteed nor easy to plan out in advance. Just do the best you can and enjoy the ride (I do need to take my own advice a bit more).

Hope this helps and welcome to your next phase in life.

 

[dmccarty]

I still don't think a tractor forum is the best place to research such a weighty topic, but you are correct that there are a lot of common sense folks here who have already been down this road.

Given the breadth of experience on TBN, it actually is a good place to research health care and retirement. There have been people on TBN who have/had deep, deep experience in Social Security and retirement health care. I learned quite a bit ove the years reading what they had to say. One is not likely to dig into the details on some issues, such as how SS calculates your monthly payment from what you have paid into the system, inflation, etc. Though there is/was a TBNer that I think could explain it if he is still around.

I have already learned quite a bit. The biggest thing I learned is that confirmation that I know about all of the health care options prior to retirement and I an not missing any.

One will have to dive into the details on those options to see which is best for them but needs to know the options. I listed some and your list is good because it listed some options I did not since I knew I would not use them.

There is one other option, which is to move to another country. I did not list that one because I think it is not what many people would do but I have discussed it.

The other reason I started this discussion is not just for me, I knew other people would read it and maybe it will help other people. From the comments, I think it already has helped and will continue to do so.

With that, I will toss out some ideas that will look random, but they all play together (and not necessarily well):

If you are not happy at work, then by all means make a change. Retire or go do something else. Life is way too short to not be happy.....assuming you have the means to do something about it.

This is true but hard to do. Age discrimination is alive and well in my industry so once one hits a certain age it does get harder to move. Thankfully, our retirement plans have been working but it is the pesky health care that is the major unresolved variable for retirement.

Health insurance options will vary somewhat depending on your state of residence, but in general they are:
1 - Employer sponsored
2 - COBRA
3 - Private plan
4 - Affordable Care Act (aka; Obama Care)
5 - Medicaid
6 - Pre-65 Medicare (you have to be seriously sick for this)
7 - Health share ministry
8 - Self insure (i.e.; no insurance)

Options 1 and 2 are the same, just a difference on who pays.
Likewise, 3 and 4 are also the same, just a difference in how much you will "probably" pay.
I suspect that 5 and 6 don't apply to you.
Option 7 really isn't "insurance". Some folks like it, but research it well.
And 8 can be a BIG gamble that "could" have life long consequences.

That is a really good list, I left off 7 - Health share ministry since I don't think it would work for us. I should have listed it in hindsight. I also should have added 9 - Move to another country. I don't think that is an option for many but it is something we have considered. To say that is a complicated option is an understatement.

Medical costs (including insurance premiums and deductibles) seem to be increasing by about 5% ABOVE inflation every year.

Note that once you are on Medicare, health care still isn't "free". Different ways to go (Advantage vs. Medigap), but here in Oregon (and friends in other states report similar), I budget $1000/month for my wife and I (we are both on Medicare) for "all" health care expenses (including dental and vision)....increasing by 5% above inflation every year. Yea, yea, I know lots of folks will come on and say how much less they pay (or think they pay)...good for them. I am just saying that Medicare isn't free. Sharing this so you can be sure to budget for your health care expenses into the future (assuming your crystal ball isn't as foggy as mine).

So that is REALLY interesting. Yesterday the wife and I were discussing a retirement budget and from what I could see, health care prior to Medicare is going to cost around $750-1000 a month for ObamaCare plans, and we would likely spend the same amount after Medicare kicks in.

You may (or may not) have lower overall expenses as you get older. Sure, you may travel less travel. But how about now having to pay someone to paint the house instead of doing it yourself. Also, you may find taxes increase as you get older.

Good point. The materials we used in our house does not require painting for this exact reason. But it is a valid point. At some point we will have to pay someone to take care of the yard, or we will move which will likely have HOA fees.

I don't really worry about tax increases per say, they may, well will, happen but the bigger concern is that Social Security payments will be reduced by hook or crook. The US is broke and something is going to happen at some point. Ironically, one of our retirement plan assumptions made decdes ago was that Social Security would not exist for us. Now, the likely hood of that happening was pretty much zero, and if it did, there would be far bigger things to worry about, but I figured it was a good way to plan. And it was. Now that we are getting close to getting Social Security, the benefit is really nice.

Warren Buffet said something decades ago about how the US pays off it's debt. The one word was inflation. The US would cheapen the dollar to pay the debt made with more expensive dollar. And he we are.

A typical retiree pays less in taxes during the first few years of retirement (especially if they haven't started Social Security) than they do later on in retirement (due to RMD's from IRA accounts). This possibly makes this early retirement time frame a good opportunity to do Roth conversions assuming, of course, that you have any Traditional IRA accounts.
But any conversions (or sale of a business, home/stock sales, etc.), could reduce your ACA subsidy (should you go that route). And/or it could trigger IRMAA surcharges on your Medicare premiums (there is a two year look back so income at age 63 will will not only effect your ACA subsidy the following year but your Medicare premiums at age 65 as well).

That is a good point too. I hope others know about RMDs. Our plan is to take out more money than we need, which is then invested which should lower the impact of RMD in the future, but that has to be balanced with how much we would be in today's tax along with the impact to ObamaCare payments.

Long Term Care isn't cheap, but you may be able to cover it by the sale of your home (assuming you own your home free and clear) since you won't need a home when in LTC. Of course, this doesn't work if you want care at home and/or your spouse isn't needing long term care at the same time. You could do a reverse mortgage (personally I'm not a fan of them).

Life isn't guaranteed nor easy to plan out in advance. Just do the best you can and enjoy the ride (I do need to take my own advice a bit more).

Hope this helps and welcome to your next phase in life.

LTC is another conundrum but selling real estate is how we would fund it. I have seen too many people needing LTC, and worse, having to provide LTC.

Thank you for your advice. It is helpful and it will help other people reading this dicussion now, and in the future.

 

[shock]

Great thread, I'm right there with many who posted. Currently I'm 64.5 yo and Medicare will start 7/1 for me. I plan to get a Supplement to cover what Medicare doesn't.
But, to get here, I've retired twice. Once in March 2021, then went on Cobra, that took me to Oct 2023. Then I went back to work just before my Cobra ran out and worked for the State Dept of Roads, quit in Feb 2024, went on Cobra again to cover me to Medicare age. I didn't find much was affordable in Nebraska for ACA. Cheapest I found was $1102/mth with a $9k deductible. $22k BEFORE they started paying for anything! There were some short term insurance plans where you re-qualified every year basically. They were cheap too. I also don't go to the doctors much, never have over the past 60 years. I've been blessed in this regard. Usually you State Dept of Roads are alwasy hiring. I loved the job, but when they stuck us out filling potholes on the expressway at 2:30 in the afternoon, I called it quits. That was dangerous.....

 

[Bendboater]

A note of caution should you choose to self insure prior to going on Medicare.
My Medigap (aka, Medicare Supplement) provider required proof that we had health insurance prior to starting their plan. I have no idea if this practice is common throughout the industry and across the country, or if Medicare part C (aka, Advantage) plans also have this requirement. I also don't know what they would have said had we not had health insurance prior to signing up for Medicare....I just know that I needed to provide this proof.
Just sharing that this could be an unexpected hiccup in picking up a Medicare supplement and/or Advantage plan if you chose to self insure prior to starting Medicare.
Perhaps another reason to work with someone who knows the issues that may apply to your state.

 

[dmccarty]

A note of caution should you choose to self insure prior to going on Medicare.
My Medigap (aka, Medicare Supplement) provider required proof that we had health insurance prior to starting their plan. ...

Yes, one needs to have "creditable coverage" on some insurance plans before getting into Medicare, otherwise, one can be more.

 

[kenmac]

Yes, one needs to have "creditable coverage" on some insurance plans before getting into Medicare, otherwise, one can be more.

A google search found this answer.....(No, you don't need to have creditable insurance coverage before you can get Medicare coverage)

 

[Bendboater]

Medigap or Supplemental insurance is an "optional" policy from a "private company" that pays the 20% Part B costs (and the part A deductible) that Medicare doesn't pay. It is in addition to Medicare (it has a separate, additional, premium). In my case, the Medigap insurer we choose sure as shooting required we have prior coverage. As I said earlier, I have no idea if other companies, in other states, do or don't have this requirement. I also have no idea if Medicare Advantage (aka, Part C) plans have this requirement since I didn't go that route.
Just sharing so folks can plan ahead if they are thinking of self insuring and then attempting to pick up a Medicare "Supplement" when they sign up for Medicare.
There is a ton of rules regarding Supplements that vary widely from state to state. Consult an independent insurance broker and/or your state SHIPA (I think that's the right acronym) office.